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Consumer Insights Roundup: Tax Perceptions and Refund Plans


By Jeffrey Henning

April 15 is the day U.S. taxpayers are required to file their federal income tax returns. What does recent research from pollsters and market researchers tell us about the attitudes of American consumers towards taxes?

Pew Research hits us with the surprising news that 34% of Americans like or even love doing their taxes. The key driver of this affection is the chance of getting a refund, cited by 29% of those who like doing their taxes, while 17% say they enjoy doing their taxes because they are good at it. Of the 56% of Americans who dislike doing taxes, 31% find it to be too complicated and 24% consider it to be time consuming and inconvenient: only 9% complain they dislike taxes because they owe the government money or won’t receive a refund.

In January, Gallup found that 36% of respondents were satisfied with the amount Americans pay in federal taxes, up from 33% in 2012. (Gallup’s latest annual survey about attitudes towards income taxes just wrapped up; expect results to be published shortly.)

Only 13% of respondents to an Insurance Research Council survey agreed it was acceptable to omit reporting some income to the IRS; in comparison, 24% said it was acceptable to pad an insurance claim to compensate for the deductible. Similarly, Pew found that only 6% of Americans said it was morally acceptable to not report all income on their taxes and 19% said that it wasn’t a moral issue.

While most Americans are against defrauding the IRS, almost as many are worried about fraud themselves: 70% of Americans think it is possible for a fraudster to use their name and Social Security Number to file a return before they themselves do, blocking their refund from the IRS. A Harris Interactive survey, conducted on behalf of LifeLock, found that 24% of U.S. taxpayers were very or extremely concerned about identity theft when filing their returns.

When it comes to receiving a federal tax refund this year, 85% of Americans in a telephone survey conducted by Braun Research for Capital One expect to receive a tax refund. Contrast this with the 47% of investors surveyed by Mathew Greenwald & Associates who expect a refund and 54% of online shoppers in a PriceGrabber survey. Braun found that 35% of Americans plan to spend all or part of their tax refunds.

When it comes to spending tax refunds, 56% of visitors will use the refund to shop, and – of those – 23% will use the refund towards travel and vacations; this exactly matches the Braun finding that 23% of those who will spend their refund will use it on vacations. In one of the sillier surveys published, a Travel Leaders Group survey – which solicited for responses using Facebook, Twitter and Travel Leader websites – found that 44% of those polled would use some or all their tax refund for travel and would use the majority of a hypothetical $3,000 refund on travel.

The investors surveyed by Mathew Greenwald (on behalf of John Hancock Financial) – each of whom had household income of $75,000+ and investable assets of $100,000+ – were unfamiliar with recent changes to the tax code: only 40% were familiar with changes to the Alternative Minimum Tax (AMT) and 49% were familiar with estate tax law changes.

While mobile device apps have become more popular from a shopping-related standpoint, mobile tax prep apps are not as widely adopted: only 7% of visitors planned to download a tax preparation app onto a mobile device in order to prepare their tax returns this year, closely matching the finding from a Viggle survey that showed 6% used tax prep mobile apps.

Finally, on behalf of The National Foundation for Credit Counseling, Harris Interactive prepared the 2013 Financial Literacy Survey, the 7th annual version of this survey, which found that 56% of Americans are worried over a lack of savings. This year about 40% of U.S. adults gave themselves a grade of C, D, or F on their knowledge of personal finance.

Once April 15 is in the past, everyone can breathe a little easier: Braun found that 86% of Americans have some anxiety towards filing their taxes. Exempting, of course, the 5% that Pew Research found “love” doing their taxes!

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